Tuesday, June 26, 2012

Learning Through Digital Technology

In the last decade, many industries have been changed fundamentally by innovative applications of digital technology tools. This state of affairs has led to the erroneous assumption that these pace of change will maintain and also that no specific industry will remain the same. Many people view the growth of Google, Apple, Amazon and mobile telephony and assume that digital technology must therefore transform every industry from energy, education, publishing and so forth. As already stated, the Internet and these new applications of digital technologies have had profound effects on industries by creating new value and made entrepreneurs very wealthy.

However, it is clear that there are industries in which the amazing effect of digital technologies seems to be overstated. Konstantin Kokaes makes a strong argument in this article in Slate Magazine that in education generally and mathematics in particular, the fact that technology is superior is more an article of faith than a demonstrated result. Among the more profound points that he makes are that the rush to introduce digital tools into education is an expensive experiment without evidence that it is either useful or cost effective. This argument is real because it is not based on a preference for what is familiar and known but is based on the fact these new tools are being pushed by interested marketers. 

I am not surprised that these new tools are not proven to be better but are incorporated into education policy by the fact that the education departments are buying them as symbols of modern ways of teaching science and mathematics. The point that I made in a blog post here remains valid.     

Monday, June 25, 2012

The Problem with Passports

One of the most baffling things to me is the way in which very educated people fall for notions with little meaning such as nationalism. The result of this dedication to amorphous ideas as nationalism is that it sometimes makes smart politics but leads to very bad outcomes for the economy. A perfect illustration of this is the immigration policy headache that the United States, among other countries, faces. Many educated people take the view that if immigration must be allowed, then it should be confined to a highly skilled cadre who will contribute to the creation of scientific enterprise and innovation. The obverse of this sensible argument is that any less educated immigrant is not worth allowing to reside in the recipient country.

While commenting in Slate about President Obama's recent decision to suspend any deportation of a selected generation of illegal immigrants, Martin Yglesias demolishes the idea that only highly-skilled immigrants are good for the US economy. In a argument that would be familiar to any keen student of economics, it is clear that immigrants who come in for low wage jobs contribute to economic prosperity because of the linkage that industries and workers create. By providing care work, the enable more households to deploy both parents in the work force and thereby raise overall welfare. One other idea that is less empirically proven but plausible is that allowing for emigration from poor countries would lead to gains that would surpass all economic assistance that comes through foreign assistance between countries. An added advantage of such a programme would be that it would also ensure that corrupt governments have less money to steal because the flow of resources takes place through households. 

With that background, it is obvious that a liberal immigration policy makes economic sense but is not always easy to sell to a patriotic crowd. Another illustration that patriotism can lead to bad economics.

A Survey of Rio+20

The Rio+20 Conference ended over the last weekend and many reports suggest that this meeting achieved nothing partly because the expectations were too high, views so far apart and the real expectations not clearly spelt out. In this piece, Jagdish Bhagwati states that he is unsurprised because of many reasons starting with the emptiness of the phrase "sustainable development". Not only has this term of reference become cliche' but it also illustrates why those who insist on it as a precondition for development are oblivious of the real tradeoffs that poor people need. In the short essay, he also states how matters unconnected to the environment are allowed onto the agenda and become part of the declarations in a way that shows the inability to focus on small and smart solutions.

Unlike Jagdish, I have no problem with any self-appointed group of activists trying to hoist their pet policy solutions on the rest of us. I would rather that they understood much better that multilateral institutions that take on every agenda are the best candidates for failure on all of them. And as a person who attends smaller conferences on select trade and regulatory matters, I think that a conference dedicated to global growth would be far more useful than Rio+40. The environment is certainly important but all who come for the conference must recall that this was about the environment and that the train can only pull in so much. The framing of global problems is one of the skills that today's society lacks.  

Thursday, June 14, 2012

Younger Workers and Property Ownership

Every person with even a little knowledge about economics would have been cautious about the resumption of growth after the financial crisis and subsequent recession. Among the lessons of the crisis and its effects is that there is no such thing as an asset that cannot lose value. Home ownership may be desirable but this crisis emphatically revealed that homes are not necessarily assets of a different category and when the prices rise beyond reason, then they will come down and leave many owners with huge and unserviceable mortgages. 

With that view in mind, I get a little surprised that articles that fail to caution against the impression that ownership of homes is imperative for all and that rental is an inferior form of consumption of housing services. This piece in the Telegraph is one of many in the British press that has provided summaries of a study undertaken by the Joseph Rowntree Foundation in which it found that the effects of slow growth and lower wages for younger workers will be seen in their inability to acquire homes and may have to resort to renting houses. To be fair, the study brings up the sound economic argument that it is useful to try and improve the efficiency in the house rental markets to ensure that it works better. 

Having just read through the publication by the Institute of Economic Affairs on housing in the United Kingdom, it is clear to me that there should be an broad understanding that rental of residential property is not necessarily inferior to outright ownership especially where individual incomes cannot match prevailing prices. That report goes into comparisons of basic benchmarks for assessing property markets and isolates regulatory gaps and missteps that frames the housing policy in UK in far better light. Its not a bad thing at all that younger people will not own homes because the gap between their incomes and the houses shows that houses are far too expensive to own and even for those with that income, it may be useful to carefully gauge whether renting is better.     

Saturday, June 09, 2012

From Absurd Belief to Atrocities

"Those who can make you believe absurdities can make you commit atrocities." Voltaire 

Tuesday, June 05, 2012

Speed Reading Test

I encountered this page on an application that allows one to test the ability to read quickly and provides a benchmark in a spectrum from high school students to college professors. My score was much slower than I am sure that I am but still impressed me. I embed it for blog readers to try.